‘OLA’ isn’t liable to deduct tax u/s 194C while making payment to cab drivers: ITAT

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  • Last Updated on 24 September, 2022

TDS u/s 194C

Case Details: ANI Technologies (P.) Ltd. v. DCIT (TDS) - [2022] 142 taxmann.com 442 (Chandigarh-Trib.)

Judiciary and Counsel Details

    • Sudhanshu Srivastava, Judicial Member & Vikram Singh Yadav, Accountant Member
    • Deepak ChopraAnmol AnandDeepak AggarwalMs Priya Tandon, Advs. for the Appellant.
    • Vivek Nangia, CIT, DR for the Respondent.

Facts of the Case

Assessee was a leading technology service provider in the cab-hailing market in India. It has established mobility for the Indian masses and it provides internet and mobile technology platform for cab hailing by the passengers. The Assessee operates under the brand name “OLA”.

The assessee had made payments to the cab drivers for “carrying out work” relating to the carriage of passengers. The Assessing Officer (AO) treated the assessee as assessee-in-default as it failed to deduct tax at source (TDS) under section 194C while making the payments to the cab drivers.

On appeal, the CIT(A) upheld the view of AO. Aggrieved-assessee filed the instant appeal before the Tribunal.


The Tribunal held that prima facie the case of the assessee was covered in its favour by the order of the Mumbai Bench of the ITAT in the case of Uber India Systems (P.) Ltd. [2021] 125 taxmann.com 185 (Mumbai – Trib.). The Mumbai Tribunal had held that section 194C was not applicable on such ayments as were collected from customers and were forwarded by drivers and further the transportation services were provided by the drivers to the users.

In the instant case, much like Uber B.V./ Uber India, the assessee only provides the mobile app “OLA” on which the Driver lists himself/herself to provide transportation services to the Rider.

The terms of the agreements of the assessee clearly bring out that it is the Driver that will provide transportation service to the Rider and not the assessee. Even the invoices raised on the Rider demarcate this distinction. Therefore, the person responsible under section 204(iii) to invoke the provisions of section 194C is the Rider and not assessee.

The Rider is entitled to use the assessee’s platform or avail transportation services only for personal use, as per the User Terms and Subscription Agreement respectively. Since such personal use by the Rider is exempt from liability to deduct tax, as per section 194C(4) no liability can be fastened on the assessee.

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